The Register of Overseas Entities (ROE) maintained by Companies House in Cardiff commences on 1 August.
This new UK register was established by the Economic Crime (Transparency and Enforcement) Act 2022, and creates new implications for overseas entities that own UK property.
To coincide with the wider commencement of the register, a new land register application form question has been introduced, inviting applicants to confirm if they are subject to the scheme. For the majority of applicants (for example UK incorporated bodies or any natural person) this question can be answered ‘no’ and no further action is required.
This register is not operated by Registers of Scotland rather it is maintained by Companies House. The Keeper of the Registers of Scotland will be under a duty to reject certain land register applications involving overseas entities who do not comply with the requirements of the Act.
Read the Companies House news article on the launch of the register.
As provided for by The Economic Crime (Transparency and Enforcement) Act 2022 (Commencement No. 3) Regulations 2022, the land registration elements of the Act will come into force on 5 September 2022, a few weeks after the Register goes live. This will provide time for those currently engaged in a relevant land transaction to comply with the requirement to register with Companies House and obtain an Overseas Entity ID number before making an application to the land register
It forms part of the UK government's strategy to combat economic crime while making sure that legitimate businesses continue to see the UK as a great place to invest.
Further secondary legislation provides details of the new regime and includes information on:
- electronic delivery of documents, protection of information and registrable beneficial owners
- verification and provision of information during the transitional period
Companies House have written blogs to explain the secondary legislation. This is split into:
Who is affected by this legislation
This new legislation means the majority of overseas entities must be registered in the new Register at Companies House and declare their beneficial owners or managing officers before they can transact on UK land and property.
The legislation defines an overseas entity as a legal entity that is governed by the law of a country or territory outside the UK.
A legal entity means a body corporate, partnership or other entity that, in each case, is a legal person under the law by which it is governed.
A beneficial owner is someone who satisfies one or more of the following conditions:
- holds, directly or indirectly more than 25% of the shares in an overseas entity
- holds, directly or indirectly, more than 25% of the voting rights in an overseas entity
- holds the right, directly or indirectly to appoint or remove a majority of the board of directors of an overseas entity
- has the right to exercise, or actually exercises significant influence or control over an overseas entity
- the trustees of a trust, or the members of a partnership, unincorporated association or other entity, that is not a legal person under the law by which it is governed meet any of the conditions specified above (in their capacity as such) in relation to the overseas entity; and has the right to exercise, or actually exercises, significant influence or control over the activities of that trust or entity
Provisions are being laid out to impose an updating duty on the overseas entity and this guidance will be updated when these come into force.
Why it’s important to register in ROE
From 5 September, certain overseas entities will not be able to buy, sell, transfer or lease land or property, or create a charge against the land or property in the UK unless they’ve registered with Companies House.
Overseas entities who already own or tenant land or property in Scotland from 8 December 2014 in the land register will be given 6 months to register in the ROE.
Any new purchasers or tenants that are overseas entities will be required to register with Companies House before applying to register their land purchase or tenancy with the land register.
For land ownership and transactions in Scotland, the legislation will introduce an amendment into the 2012 Land Registration (Scotland) Act that the keeper must reject applications for registration if the overseas entity:
- is in scope of the Act
- has not registered in the new ROE
- does not provide their overseas entity ID
RoS will introduce new questions on the application form for land registration that are relevant to overseas entities. The new questions will be straightforward and the application form will guide you through them. If an overseas entity is a party to the transaction questions will require to be answered on whether they are in scope of the 2022 Act, compliance, and a requirement to provide their overseas entity ID.
Learn more about registration in different scenarios.
Failure to comply
Overseas entities who do not register will face sanctions such as daily fines and not being able to transact with their land or property, including:
What does this mean if the overseas entity has registered in RCI?
A registration by an overseas entity in the Register of Persons Holding a Controlled Interest in Land (RCI) does not remove the requirement for an overseas entity to register in ROE.
A registration of an overseas entity in ROE will not remove any duty on the overseas entity should they be required to register in the RCI.
When RCI and ROE were initially in policy development the view of both the Scottish Government and the UK Government was that double reporting should be avoided where possible. Our current understanding is that this has not changed and that the Scottish Government will consider the extent of duplication once the new ROE is operational and then decide whether it is appropriate to amend the RCI regulations.
It’s important to note that in the meantime overseas entities that are in scope of RCI must register irrespective of ROE and make arrangements to comply with RCI legislation ahead of the transition period ending and criminal offences coming into force in April 2023.
Learn more about:
Distinctions between RCI and ROE
Only affects land and property in Scotland
Affects land and property across the UK
Includes but is not limited to overseas entities
Only for overseas entities
The aim of RCI is to improve the transparency of ownership where ownership is unclear. This makes it clear who controls decision-making where it's not transparent elsewhere. It also allows key persons to be contactable.
The aim of ROE is to prevent overseas entities from using land and property in any of the UK jurisdictions for money laundering. The benefit of transparency is secondary.
Does not affect an overseas entity transacting including buying, selling, leasing, and borrowing with their property in Scotland
Will affect an overseas entity transacting, including buying, selling, leasing, and borrowing with their property in Scotland
Find out more
- guidance on this register
- agent assurance codes
- on the progress of ROE
- ROE factsheet
- information about ROE from Companies House
- Department for Business, Energy & Industrial Strategy news release